Last Call

Early this month, Bill Clinton told the visiting Israeli justice minister, Yossi Beilin, that he was ready to devote the remaining weeks of his tenure to Middle East peacemaking. As a lame-duck president, he said, his calendar was clear.

In and around Washington this week, Israeli and Palestinian negotiators are taking up the offer -- and testing each other to see whether it's worth wrecking the first family's Christmas holiday.

The talks represent Ehud Barak's last fling before he faces his electors and the Likud's Ariel Sharon in February. He wants to present himself as the peace prime minister, turning the election into a referendum on a deal to end the 100-year conflict. The latest polls suggest that, despite the trauma of the Palestinian intifada, the voters still want peace and are prepared to pay a territorial price. Whether they trust Barak to calculate the odds is another question.

The Labor leader has already dropped his insistence on an end to violence as a condition for resuming negotiations. However much it goes against the grain, Foreign Minister Shlomo Ben-Ami is bargaining under duress. The same night that the Israeli delegation flew to the United States, the isolated West Bank settlement of Psagot came under intensive machine-gun fire. For the first time, the Israeli army evacuated families for their own safety.

No one this week is ready to bet on the outcome. "The big question," a senior Israeli diplomat said, "is whether Yasser Arafat really wants an agreement, or whether he is striking a tactical pose."

Does the Palestinian leader feel that the violence of the last three months has achieved its purpose? With the blood of 300 "martyrs" on his banner, can he now proclaim a Palestinian state that satisfies less than 100 percent of his people's expectations? Or does he just want to keep Uncle Sam happy?

In public, Arafat's negotiators are still going for broke. One of them, Saeb Erekat, told foreign correspondents: "The peace process is in Barak's hands. This is his moment of truth. He knows what it takes to make peace with the Palestinians. Israel has to end the occupation. That means withdrawal to the borders of June 4, 1967, including East Jerusalem."

Yet over the past week, there are signs that the gaps are narrowing. "Both sides," said the Israeli diplomat quoted above, "want to control the violence, enhance security cooperation and get back to the negotiating table."

Shrewd observers here have noted the Palestinian Authority's mild, almost acquiescent, response to the new Israeli strategy of picking off individual intifada plotters and gunmen. Arafat is not letting the assassination of more than a dozen activists, including some from his own Fatah militia, get in the way of the diplomacy. Some Hamas terrorists, released from Palestinian jails during the Intifada, are reportedly clamoring to go back for their own protection. Arafat is happy to oblige.

In his pre-Washington briefing, Erekat pointedly did not write off last July's Camp David summit. It was, he acknowledged, the first time a Palestinian president and an Israeli prime minister addressed the core issues. "Both sides," he said, "came a long way, but not far enough."

Behind the maximalist rhetoric, Camp David remains the Palestinians' bench mark. "There is no room now for partial agreements," Erekat argued. "There is no room for fragmenting the issues."

Other Palestinians say Arafat has to assess whether it's worth sticking his neck out for an unpopular compromise when Barak may have neither the time nor the power to deliver. European diplomats, based on the West Bank, also question whether the Palestinian leader has the authority any longer to rein in the gunmen, who are increasingly dictating the terms of confrontation.

Still, a trade-off is taking shape. Barak is offering to be more flexible on Jerusalem and the settlements, provided the Palestinians will lower their demand for hundreds of thousands of refugees, who fled or were expelled in 1948, to return to homes inside Israel. The package would include an exchange of territory. Israel would annex settlement blocks close to the old Green Line border; the Palestinians would be compensated with a patch of the Negev adjacent to the Gaza Strip.

Arafat must know that Ariel Sharon would not offer anything so generous. He must know that George W. Bush will be in no rush to pick up Bill Clinton's mediating baton. There is a window. But, as his rejection of the Camp David terms showed in July, Arafat has his own agenda; he insists on writing his own script. If he doesn't get what he thinks he can sell to his constituency, he will sit it out.

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